It's year 10's English class in a ­London comprehensive. Forty kids are debating the purpose of a school. "Teaching social skills," they suggest. Why do you need them? I ask, playing devil's advocate. "To get a job." Is that the only point of having social skills? "Yes, what else is there?" One demurs, hesitant and not entirely sure how to ­express herself. "No, there's more to life than a job. There's happiness. Social skills are needed to make you happy."

It was a fascinating illustration of how deeply the instrumentalist values of the market have penetrated our everyday thinking when kids talk in this way. "Social skills" is the type of phrase management experts dreamed up to put a market value on a set of human characteristics. Cheerful, punctual, able to co-operate, take instructions: these are all marketable skills. But to many of these kids, equipping them for the labour market was the primary purpose of ­education. Any idea of it as enriching and deepening their understanding of what it is to be human and lead meaningful, contented adult lives, had been entirely lost to view. The one girl who offered an alternative was just as instrumentalist, only her goal was different: social skills were needed for not a job but for her personal happiness.

These were bright and interested 14-year-olds, but if you ran this argument in any other school, you'd probably get pretty similar responses. The gap that intrigued me was the absence of any notion of being a good person, or of the many values that might not be able to command a market price such as being challenging, courageous, truthful, honest, spontaneous, joyful or even kind, compassionate.

I started with this classroom anecdote because it seems a good way to make concrete an absence. The central premise of the Citizen Ethics supplement published in this paper at the weekend (the full pamphlet can be downloaded on Comment is free) is that we have lost a way of thinking and talking about some very important things. The preoccupation with market ­efficiency and economic growth has loomed so large that other activities, and other ­values, have been subordinated to its disciplines. "You can't buck the market," said Margaret Thatcher, and no government has disagreed since. It was the adage that was used to justify soaring pay for the highest earners and stagnant earnings for the low-paid. The ­market ruled, and questions of injustice, honour or integrity were all secondary or irrelevant.

A poll for the World Economic Forum last month found in 10 G20 countries that two-thirds of respondents attributed the credit crunch and its ensuing economic recession to a crisis of ethics and values. Sir Thomas Legg declared in his final report on MPs' expenses that there had been a failure of ethics. There's a widespread perception that social norms have subtly and gradually shifted towards the centrality of ­personal self-interest. As long as it's legal, it's legitimate; no further ­individual judgment is necessary. ­However much we may have laughed at the Gordon Gekko's "greed is good" line, we can now see how it seeped into ­powerful institutional cultures such as the City and parliament.

Citizen Ethics was a project to ask nearly four dozen prominent thinkers what this was all about. Did ethics really have a role to play, and had it failed? First, despite plenty of disagreements, on one thing there was a clear consensus: ethics are crucial. They are the underpinning to all political debate; they frame the questions we ask of ourselves and of our political economy and therefore do much to shape the answers we end up with.

They are vital to the civic culture in which both politics and economics are ultimately rooted. So, as Will Hutton will do in his book, Them and Us, out in the autumn, if we really want to understand how some of the incredible myths perpetrated over the last couple of decades have gone unchallenged, we have to go back to some basic arguments of philosophy. What is justice? Who deserves what? What constitutes human flourishing?

Too many of these questions have simply been shelved for too long. Questions of justice and reward were left to the market to resolve; questions of human flourishing were privatised. It was left to everyone to decide their own sequence of pleasurable experiences in life with little acknowledgement of how many of those depend entirely on mutual co-operation. The classic paradigm is sitting in a traffic jam in your 4x4 with its astonishing powers of ­acceleration rendered useless.

One explanation for this abandonment of the debate is that we lost a language in which to think and argue about ethics. Perhaps this is partly attributable to the vexed legacy of institutional religion and the long shadow it still casts. The promotion of ethical behaviour has been bound up with particular institutions, and as they decline, it leaves a vacuum of authority. Who dares talk on this subject with confidence? It prompts fear that any such discussions are really a Trojan horse for promoting a religious belief. There's a suspicion that words such as "morality" tip us quickly into the kind of instinctive conviction made infamous by Tony Blair in which sincerity is regarded as an adequate substitute for careful reasoning.

Even the language itself is mired in a history of ­social control; morality and virtue are words that are reluctantly used, since both still convey overtones of intrusive monitoring of (particularly female) sexual behaviour.

But since most of the contributors to this pamphlet express their commitment to ethics without any reference to religious practice, perhaps it is finally possible to move beyond these familiar anxieties and resume a task of ethical reasoning regarded through most of history as essential to being human. This is philosophy as the Greeks understood it – love of the wisdom to lead lives of meaning and fulfilment, not some kind of abstract game with words.

Ethics is a word that derives from two Greek words, ethos for habit and ethikos for character, and it better fits what Citizen Ethics proposes rather than "morality", which comes from the Latin word "mores" for social institutions and customs. This is not about reasserting conventions, a preconceived code, but about reinvigorating a habit, a pro­cess of reasoning to the perennial question: what is the right thing to do? We wouldn't claim there is a consensus waiting to be found – on the contrary, our aim is to provoke a noisy debate on what kinds of habits and characters we need to run the good society.

To go back to the lovely kids in the classroom, what is the good society we want to inspire them with – beyond their future roles in the economy as workers and consumers? What habits and character can we offer them as ­conducive to deeply rewarding lives? If we don't know plenty of possible answers to that question, it's no ­surprise they don't.